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I recently installed a new furnace with a 1200cfm blower. The old furnace had a cut-out for a 16x20 filter. Is this big enough? Furnace runs better when filter is removed. Any info will be very much appreciated. Thank you
 

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1200 cfm is for a 3 ton AC so yeah your hole is too small.

16x25 is required. Did you buy a larger BTU furnace? If you had a 16x20 then the return duct may be too small and or the main duct is too small also.

You cannot upsize furnaces as it is not just the return air size that matters. If it is too big then it will run too hot and short cycle on the high temp limit control and stress it out.
 
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